MTN

[THRESHOLD]

Long-term short. Against my credo - but... start with 10 to 20 000.

[THRESHOLD]

I would just like a little rally togo short on in order to get things off to a flying start...

[Rams]

What if the little rally becomes a big rally? Stop loss?

[THRESHOLD]

Actually - RAMS - I think I'll stick with my credo: no shorts. This thing could circle the drain for years; AND my maximum upside is 100% (very unlikely.) I need to be careful of doing things just to prove a point (to myself as much as anyone else.) I'll stick with my longs - I see my NTC position is breaking to the upside - so that will be 25% in a couple of months and pretty low risk. More comfortable with this kind of play.

[Rams]

Yes , agree, with the shorts, TIME can be very cruel without the stop loss! By the way, a short on MTN will be on below 120....

[THRESHOLD]

Time on a short earns you interest on your exposure. But, the opportunity cost can be nasty. As to a technical level for a short - I have a different approach/outlook: I would short the next strong rally - to profit from (a) the retracement and (b) the momentum to the downside.

[#7]

there is no such thing as a long term short. A short is a trading position with a clearly defined entry and exit. Since it is a geared instrument you will be using, you will have time decay, which limits the length of time you can hold on to your position.

[THRESHOLD]

No - you are wnong, Skaap. There certainly is such a thing as a LONG TERM short! SAPPI etc are examples. There is no time decay. The counterparty pays you interest on the position. Understandable mistake since you are an "anti-shorter."

[THRESHOLD]

Unless you were to buy into a position in PUT WARRANTS - but these are not actually "shorts" they represent, instead, a "right" to assume a short position. The speed of decay is insane, especially when delta picks up. Why anyone buys these things to trade is a mystery. They are really gambling more than anything else.

[#10]

3-4% per annum uncompounded, minus any dividends paid. so effectively 0. But fair enough, no time decay on a CFD. There is something wrong with the concept though, because someone must be paying, just can't put my finger on it

[Rams]

Thresh, do you use stop loss on shorts?

[THRESHOLD]

Well - I don't short...

[doomsdayza]

the cash pay away of a dividend on a short position should be offset by the decrease in MTM on the CFD in theory, so net net 0.

i lend you 200 MTN shares to short on the open market. in exchange you give me R2000 as collateral in the form of a deposit on the borrowed shares. i have to pay you interest @ 5.23% to compensate you for use of funds.

[Rams]

but if you shorted MTN, would you have put in a stop?

[THRESHOLD]

5,5% pa. When you go short, the counterparty sells the stock into the market and "gives" you the proceeds. Hence you earn interest oon these funds. You accept the risk of the trade moving against you (UP.) Clearly you will receive no dividends. So nobody loses. Nobody wins. Unless the stock moves.

[THRESHOLD]

I would only go short if it broke to the upside (sounds counter-intuitive, I know.) But, remember this is a long term position, not a "true" trade since I don't do the classic trading thing. Thereafter - NO - no short - or it would defeat the long term view. I would look to take profits if the stock moved aggressively though - always with a view to resuming my position at a price higher than the exit price. So, I guess that amounts to a quasi-short.

[THRESHOLD]

I would only go short if it broke to the upside (sounds counter-intuitive, I know.) But, remember this is a long term position, not a "true" trade since I don't do the classic trading thing. Thereafter - NO - no short - or it would defeat the long term view. I would look to take profits if the stock moved aggressively though - always with a view to resuming my position at a price higher than the exit price. So, I guess that amounts to a quasi-short. AND hence, a QUASI-STOP.